The Inter-American Development Bank will vote for a new president this weekend, ending a chapter that left the institution treading water during a critical time in the global economy and bruised by a scandal that led to the ouster of Mauricio Claver-Carone over an improper sexual relationship with a staffer.
“The last two years have been difficult in a lot of respects,” said Therese Turner-Jones, an economist and former IDB senior official. “People are looking for a leader who can chart a new course,” she said in a phone interview from Jamaica.
Claver-Carone, a Trump administration nominee and United States citizen in a role usually reserved for a Latin American, was forced out in September following the sex scandal and ethics probe, setting up an accelerated race for a new president.
The vote is scheduled for Sunday, with the five candidates confirmed a week ago. According to sources, interviews with the board have already been taking place.
The five nominees are Argentina’s Cecilia Todesca Bocco; Trinidad and Tobago’s Gerard Johnson; Mexico’s Gerardo Esquivel Hernández; Brazil’s Ilan Goldfajn, and Chile’s Nicolás Eyzaguirre Guzmán.
While none of the candidates elicit sharp concerns, there is no clear candidate yet, according to experts interviewed by Devex. Some clearly have better odds in their favor.
There is also an outside chance that member states cannot reach the required absolute majority to name a president this weekend.
“This is a very interesting race,” said Turner-Jones, adding quickly. “But so much hinges on geopolitics.”
“People are looking for a leader who can chart a new course.”
— Therese Turner-Jones, economist and former senior official at IDBGoldfajn, who is currently at the International Monetary Fund, potentially stands a good chance of winning, but Brazil is divided over his future because he was nominated by the outgoing right-wing administration. Brazil elected leftist Luiz Inácio Lula da Silva as president last month, which means voters may be less enamored with Goldfajn’s candidacy.
If the division weighs heavily on Goldfajn and he’s ruled out, another candidate with a good shot is Chile’s Guzmán, a middle-of-the-road technocrat who still is in line with the general political zeitgeist in the region and who may gain the support of Washington, D.C. The former government minister would likely head to a tight race with Mexico’s Esquivel, a central banker.
The sheer number of candidates is seen as positive because it makes the race competitive. But it also indicates that Latin America remains ideologically divided, even among leftists during a so-called pink wave of socialist-leaning governments from Mexico to Argentina.
Whoever is named president will have to deal with a region wracked by global shocks, from economic decline caused by the pandemic to the fallout from Russia’s invasion of Ukraine, which has helped jack up food and fuel prices.
At the same time, across the region, but especially in the Caribbean, the last few years have demonstrated the need for a climate agenda and an increase in support for countries to develop resilient and greener economies.
The recent rise of Mia Mottley, prime minister of Barbados, as a climate finance champion for lower-income countries is not by chance and reflects the urgency of the issue in a region where hurricanes are a growing worry.
“Countries need an IDB president who can offer a compelling vision which combines an economic recovery consistent with achieving net zero emission and climate-resilient economies, which can drive growth and investment and reduce major risks to public finances,” Guy Edwards, a former IDB senior consultant, told Devex.
Like others interviewed, Edwards stressed that whoever takes over needs to be a “consensus builder able to regain trust.”
His message was felt during a panel discussion on Thursday at the Center for Global Development. Four of the five candidates — the Argentine, the only woman out of the pentad, did not appear — spoke about their vision for the bank, with almost all emphasizing the choppy waters ahead, including rising interest rates.
There was also a sense that the candidates feel the bank needs to boost morale among staff and enact reforms to position itself for the future, potentially through taking more risks and expanding its balance sheet, even as it preserves the AAA credit rating.
This would also mean moving the bank to tackling new challenges like climate change concerns, while not neglecting its foundational agenda of fighting poverty and inequality.
Another key issue is which candidate would be best positioned to crowd in private capital. All the candidates appeared to agree that resources are truly finite and without investors putting in their money, especially for infrastructure and climate, the development goals will lag.
Hanging over all of this is whether the winning candidate can hit the ground running, or will need some time to settle in, delaying the implementation of changes.
“Everyone’s just holding their breath that the next leader gets us back on track,” said Turner-Jones.
About the author
Shabtai Gold
Shabtai Gold is a Senior Reporter based in Washington. He covers multilateral development banks, with a focus on the World Bank, along with trends in development finance. Prior to Devex, he worked for the German Press Agency, dpa, for more than a decade, with stints in Africa, Europe, and the Middle East, before relocating to Washington to cover politics and business.